Clearing houses and insolvency

The International Air Transport Association clearing house scheme, judged by the House of Lords in British Eagle International Airlines Ltd v Cie Nationale Air France to offend fundamental insolvency principles, has now been held by the Australian High Court in International Air Transport Association v Ansett Holdings Ltd, reversing the court below, to be compliant with insolvency law as a result of amendments made to the scheme in the wake of British Eagle. The decision in Ansett Holdings repays close attention for what it has to say about clearing houses and netting schemes.